During the week ending on March 8, 2018, Broad Money (M3) declined by a weekly LBP 306B ($203M) to reach LBP 208,670B ($138B). On a yearly basis, M3 added 3.34% and marginally rose by 0.28% since the start of the year.
M1 also narrowed by LBP 246B ($163M) to LBP 10,187B ($6.8B) over the week. The increase is attributed to a LBP 306B ($203M) decrease in demand deposits which overshadowed an increase of LBP 60B ($40M) in currency in circulation.
Total deposits (excluding demand deposits) dropped by LBP 60B ($40M) over the same week, on the back of a fall of $19M in deposits denominated in foreign currencies and a weekly decline of LBP 31B ($21M) in Term and savings deposits denominated in local currency (LBP).
The broad money dollarization rate rose from 61.52% last week to 61.60% by March 8, 2018. According to the Central Bank, the overnight interbank rate steadied at 4% in January 2018.
In the Treasury Bills Auction held on March 15, 2018, the Ministry of Finance (MoF) raised LBP 803B ($533M), through the issuance of bills maturing in 6 months (6M), notes maturing in 2 Years (2Y) and bonds maturing in 10Y. The largest demand was achieved on the 10Y bonds, which accounted for 43.61% of total subscriptions, while the 2Y notes and 6M bills accounted for the remaining shares of 43.59% and 12.80%, respectively.
The discount rates on the 6M bills stood at 4.87% while the coupon rate on the notes maturing in 2Y and the bonds maturing in 10Y stood at 5.84% and 7.46%, respectively. The existing maturities exceeded new subscriptions by LBP 1,071B ($710M).